TELECOMS & MOBILE
Meteor glows brightly in Eircom results
28-05-2008
by Deirdre McArdle
Eircom posted a 5 percent jump in group revenue for its third quarter, as Meteor once again shone brightly with a 28 percent year-on-year jump in revenue.
Group revenue at Eircom came in at EUR515 million for the quarter ending 31 March, with earnings before exceptionals such as restructuring costs amounting to EUR175 million, an 11 percent rise from the same period last year.
Meteor continued its strong performance record with revenue increasing by 23 percent year-on-year to EUR120 million and earnings before interest, tax, depreciation and amortisation (EBITDA) growing an impressive 88 percent over the year, from EUR16 million to EUR30 million.
Higher ARPU (average revenue per user) and strong subscriber growth were behind Meteor's notable results, with the mobile operator closing in fast on the 1 million subscriber milestone. As of the end of March Meteor subscribers numbered 975,000, with 13,000 added during the quarter.
The results showed that Meteor's monthly blended ARPU rose 5 percent to EUR40 for the nine-month period to 31 March 2008 compared to the same period the year before. This was primarily due to increased subscriber activity and a higher proportion of post-pay subscribers. Post paid subscribers stood at 120,000 on 31 March 2008, up 34 percent year-on-year.
Meteor has finally decided to get in on the mobile broadband act, joining Ireland's other three mobile networks with an offering of its own. For that it has hooked up with Ericsson to roll out a 3G mobile broadband service. Whether or not Meteor has come too late to that particular party remains to be seen, although evidence suggests the market still has opportunities for new entrants. A recent report by ComReg indicates a high level of adoption of mobile broadband among Irish firms, with 55 percent of large corporates signing up and 24 percent of SMEs. While Vodafone has gained first-mover advantage in the sector with 75,000 subscribers, the market is far from reaching saturation point.
Meanwhile, in the fixed-line broadband market Eircom is continuing to add customers. Some 37,000 DSL broadband subscribers signed up with Eircom during the quarter, bringing its total to 571,000 DSL customers as of 31 March. The results indicate that this figure had grown to 585,000 by 15 May.
Rex Comb, Eircom's CEO, suggests the firm's broadband subscriber growth is a result of steps taken to "stimulate demand through increased availability and the current significant programme of broadband speed upgrades".
Comb indicated that the firm's restructuring programme is going according to plan, with headcount in its fixed-line business cut by 476 since July 2007. The three-year restructuring plan was announced last May, with Eircom aiming to cut staff numbers by 900 over that period.
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